A very warm welcome to our fourth issue of Conyers Coverage. This issue focuses on the evolution of the Cayman Islands insurance industry. We share an interview with Nate Gemmiti, Chairperson of CIRCA, and introduce you to the Head of our Cayman office, Kevin Butler who, following time in Bermuda, has worked in the Cayman insurance industry for more than 17 years. We also share an article on what the recently passed Legal Services Act, 2020 means for the Cayman Islands insurance industry, as well as an article on Business Interruption Insurance, and provide you with timely regulatory updates.
As always, we welcome your comments or article suggestions for future issues, and please don't hesitate to get in touch if you would like to contribute to future editions of Conyers Coverage.
Enjoy the read!
Q&A with Nate Gemmiti Chairman of the Cayman International Reinsurance Companies Association (CIRCA)
The Cayman International Reinsurance Companies Association (CIRCA) was founded earlier this year to promote the interests of commercial reinsurers in the Cayman Islands and to work collaboratively with all stakeholders in the expanding segment of the Cayman Islands financial industry. Conyers Coverage sat down with Nate Gemmiti, the Chief Operating Officer and General Counsel of Knighthead Annuity & Life Insurance Company and Chairperson of CIRCA, for a wide-ranging interview on CIRCA and the state of the reinsurance industry in the Cayman Islands.
The Legal Services Act, 2020 (the "LSA") was gazetted on 7 January 2021 and is expected to come into force once the Regulations have been finalised and a commencement order is issued in the next few months.
The LSA has been a long time in the making. The legislation seeks to repeal and replace the Legal Practitioners Act (2015 Revision); to regulate the practice of Cayman Islands law; to provide for a system of legal education; to provide for a system to deal with professional misconduct; and for incidental and connected purposes.
To Business Interruption Insurance or not to Business Interruption Insurance - A Cayman Islands perspective
The COVID-19 pandemic has triggered an increasing number of contested Business Interruption Insurance claims between policyholders and insurers worldwide. In the USA alone, over 1,250 Court cases have been commenced since March 2020, with policyholders nation-wide claiming insurance coverage for Business Interruption losses, both as individual Plaintiffs and as part of larger class actions.
The Cayman Islands Department for International Tax Cooperation's online portal ("DITC Portal") opened in January 2021 to facilitate economic substance reporting to the Cayman Islands Tax Information Authority pursuant to the International Tax Co-operation (Economic Substance) Act (2021 Revision) (the "ES Act"). Insurers claiming the "tax residence outside of the Cayman Islands" exemption were required to file the applicable form on the DITC Portal, with the due date for the filing of the economic substance return for most other insurers due to be filed on or before 31 April 2021.
CIMA's new regulatory policy relates to the grant of licences to Class B insurers pursuant to section 4 of the Insurance Act, and provides the procedure and assessment criteria for the licensing of Class B Insurers by CIMA (with particular detail in relation to fit and proper criteria and management, business plans, funding and collateral arrangements and compliance arrangements). The policy also specifies procedures for the reclassification of Class B licences, provides additional guidance for segregated portfolio companies and sets out information concerning record retention and redomiciled entities.
CIMA Rule - Professional Qualification Requirements for Insurance Companies, Brokers, Agents and Agencies
Introduced in February 2021, this Rule addresses necessary qualifications and competencies and continued professional training and development requirements for insurance companies, brokers, agents and agencies. An explanation of the application of policies and procedures contained in CIMA's Enforcement Manual in the event of non-compliance is also provided.
In Bermuda, Conyers has long been the market leader in the insurance space and Kevin started his offshore legal career there in 1997 as an integral part of the insurance team working with such notable clients as ACE, XL Bermuda Ltd., Renaissance Re and MetLife.
With many insurers recognising the benefit of using both Bermuda and the Cayman Islands, Kevin continued to work for clients in the insurance industry after moving to the Cayman office in 2004. In Cayman, Kevin's practice runs the gamut of insurance work from setting up Class A insurance companies to working with various brokers, captives, insurance managers and advising on insurance linked securities.
In his 17 years working in the jurisdiction, Kevin has seen an increase in the complexity of the insurance deals done on island and increased regulation at all levels. With this increase in complexity and regulation, and Bermuda assuming Solvency II equivalency, Kevin foresaw an opportunity for the Cayman Islands to increase its share of the insurance market generally, and for Conyers to expand its insurance footprint locally, by hiring Derek Stenson as Head of Insurance in 2018.
He further expanded the team in 2019 to include two additional full-time insurance attorneys and a consultant. Since that initial expansion, the Cayman team has gone through a period of strategic growth and diversified its insurance capabilities to include specialists in regulatory and finance. Additionally, the team has a strong insurance and reinsurance disputes practice helmed by Alex Potts QC who specialises in this area.
As a result of this expansion, Conyers has the largest offshore insurance practice and is the sole firm ranked Tier 1 by Legal 500 for insurance and reinsurance in both Bermuda and the Cayman Islands.
- CIMA announces its Q4 Insurance
We're extremely pleased to note that Conyers assisted a sizeable majority of all new licensees registered this quarter.
- Cayman Islands Government Commits to AML/CFT Effectiveness after FATF 'Grey listing'
- Suzanne Sadlier moves from Deputy Head of CIMA's insurance division to Head of Onsite Inspections
- Kara Ebanks assumes the role of CIMA's Acting Deputy Head of the insurance division
- Adrian Lynch completes his move to Artex as Executive Vice-President North America
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.